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What exactly does home insurance cover?

There’s been some confusion among some homeowners regarding what their home insurance policy actually covers.

Home insurance covers your house and related structures, as well as some of your personal belongings. So when you ask for home insurance quotes, you also have to make sure you know what items are actually covered.

It surely doesn’t cover all your possessions. Your garage, for example, may be covered so that if it burns down then the home insurance can cover a portion or even the entirely of the cost of repairs. But if your cars inside burn down as well, then that’s not part of the home insurance agreement. That’s for the car insurance more likely.

To clarify things further, let’s take a few of the more common coverage options that you normally find in a standard home insurance policy.

The Main House

This covers the main structure of your house, and if it is damaged in some way then the insurance agency can help pay for the repairs to the structure of the house. If the house was totaled then the insurance company pays for the total rebuild of the house, or at least up to the amount specified in the policy.

The payment depends on how the house was damaged. It must have been damaged by a specific peril that’s mentioned in the policy. Fire, as you can imagine, is a commonly mentioned peril in these policies. But it may surprise you to find out that floods are actually not covered by most home insurance policies. The same goes for earthquakes.

Other Buildings

These refer to structures that aren’t attached to the main house. Usually this refers to a garage, though it can also be a workshop. The type of coverage protection that the main dwelling gets can also be applied to these structures. If it’s damaged by a covered peril, the insurance company pays for repairs.

Motel or Hotel Rentals

While your house is being repaired, you may need to live somewhere else like a hotel or a motel, and the insurance company pays for your family’s lodgings.

Personal Items

This is where things can get a bit confusing. You need to ask the insurance agent to specifically name the items that are covered and those that are not. In many cases, the insurance company may not insure extremely valuable items, such as expensive jewelry or artwork.

You will have to specify that these items are covered, and if they’re very expensive then you may end up with a huge premium. Most of the time, you probably have to get a separate policy for these expensive items.

Don’t forget that once again the peril for your belongings must be specified. So check that problems such as theft are part of the coverage. Usually, there’s also a limit on how much money your insurance company can pay up for your belongings.

Personal Liability

If one of your houseguests gets injured in your home, you might be liable to pay for their injuries. This is why it’s crucial to have a home insurance policy, so the carrier can cover the expenses of the injured.

In some cases, the coverage includes medical payments even without any liability hearing. So if a guest does get hurt, your insurance company pays whether you’re liable or not.

Conclusion

Some policies can have optional coverage for other types of perils, such as mold or water backup. The key is to specify just about everything in the policy so there are no surprises. You know what items and perils are covered, and you know how much the insurance company can pay for your expenses.